Banking inquiry report: Crisis in banks caused directly by decisions of 'bank boards, managers and advisers'
The crisis in the banks was "directly caused by decisions of bank boards, managers and advisers to pursue risky business practices, either to protect their market share or to grow their business and profits."
The long-awaited report into the banking inquiry said that banks "moved far way from prudent lending principles".
No single event or decision led to the failure of the banks in the lead-in period to the Crisis, but rather it was the cumulative result of a series of events and decisions over a number of years.
Fianna Fail committee member Michael McGrath TD said the inquiry has "enhanced our understanding" of the economic crash.
Asked if Fianna Fail has avoided being blamed for the economic crisis in Ireland he said "That's for others to judge".
"People will have to judge the report in the round.
"I'm not going to put a spin on it. People will reach their own conclusions," he said.
The Banking Inquiry report also found has found that the significance attached to the 'night of the guarantee' - September 29, 2008 - was "a myth".
The committee reported that the idea of guaranteeing the banks was "in reality" considered as part of a range of options as early as January that year.
Among the other key findings were:
* The Financial Regulator adopted a 'light touch' and non-intrusive approach to regulation.
* The Central Bank underestimated the risks to the Irish financial system
* Both institutions were "aware as early as 2003" that banks were placing an increasing reliance on lending to the property sector.
* Neither "intervened decisively at the time or in the years prior to the crisis".
The report found that government taxation policy reduced direct taxes and transferred reliance on pro-cyclical taxes leading to a "structural deficit".
It states that government fiscal policy resulted in significant, long-term expenditure commitments funded by unsustainable transaction-based revenue streams.
Fiscal policy after 2001 was not focused on mitigating and managing property price increases.
If steps had been taken "the severe overheating from 2003 to 2007 could have been mitigated", according to the committee.
The Committee recommended changes for banks, external auditors, State institutions and Government policy and the Oireachtas to minimise risk in the future.
* All members of bank boards should have requisite financial skill sets including risk and governance.
* A detailed commercial property price register should be introduced.
* Members of the Central Bank board appointed by the government must include sufficient expertise and experience in financial stability and prudential regulation.
* Bands should be set on the proportion of tax revenue accounted for by defined cyclical transaction taxes with triggers for action when breached.
* Oireachtas Committees should be reviewed and resources provided to increase their effectiveness.
The chairman, Mr Lynch, said that it is "crucial" that the information in the report and its recommendations are acted upon by the next government and financial institutions.
He said this needs to happen "so that people will be able to buy a home in an affordable and sustainable way".
Meanwhile, the report states that the "almost universal adoption" of the theory that the country would have a 'soft landing' is the "key failing" for the government, Central Bank and Finance Department.
The committee also found that there was "no independent in-depth 'deep dive' investigation of the banks had been commissioned by the authorities before September 2008 and the Guarantee was decided upon in the absence of accurate information about the underlying health of financial institutions."
The report says there were two crises - banking and fiscal.
These were caused by four key failures - in banking, regulatory, government and Europe.
The report was published this afternoon with Banking Inquiry. Two members Pearse Doherty of Sinn Féin and Anti-Austerity Alliance TD Joe Higgins refused to sign the report.
Chairman Ciarán Lynch outlining the key points.
The report states how by October 2010 Ireland's entry into a bailout programme was "inevitable".
However, the timing of the entry into the programme was determined by factors outside the control of the then Fianna Fáil/Green Party government's control.
"The ECB put the government under undue pressure to enter a programme, but also insisted that there would be no burden sharing with bondholders," the inquiry found.
"Each crisis has at its origin a belief that 'this could never happen again' or that 'this time is different'," Mr Lynch said.
"One description of this recent crisis was that it was a systematic misjudgement of risk; that those in significant roles in Ireland, whether public or private, in their own way got it wrong; that it was a misjudgement of risk of such a scale that it led to the greatest financial failure and ultimate crash in the history of the state.
"This is one part of the story. The failure to identify the potential risk posed to the overall financial stability of the State by the banking system is another key lesson which must be learned," Mr Lynch continued.
He added that it must be recognised that there is a lack of an overall framework at a European level for dealing with the financial crisis.
"The report's findings and recommendations show that lessons must be learned and applied.
"There is no certain formula to avoid another crisis, but constant vigilance and early preventative action is crucial."